Stellus Capital (NYSE:SCM) Investment Corporation (NYSE:SCM), a Maryland-based investment company, announced the approval of all proposals presented to shareholders at its Annual Meeting on June 20, 2024. The meeting's agenda included the election of directors and authorization to issue shares below net asset value (NAV).
Shareholders re-elected Robert T. Ladd and J. Tim Arnoult to the board, with Ladd receiving 13,269,460 votes for and 580,559 votes withheld, while Arnoult secured 12,274,784 votes for, with 1,575,234 withheld. The approval of these directors ensures continuity in the company’s strategic direction.
In addition, a significant proposal was passed allowing the company to issue up to 25% of its outstanding common stock below the current NAV per share, subject to board approval. This move could provide the company with flexibility in raising capital. The proposal received 10,552,051 votes for, 2,742,442 against, and 555,512 abstentions from all shareholders. Excluding affiliates, the vote count stood at 9,425,879 for, 2,742,442 against, and 555,512 abstentions.
In other recent news, Stellus Capital Investment Corporation has reported a robust first quarter for 2024. The company has successfully covered its dividend of $0.40 per share with a GAAP net investment income of $0.42 per share. An increase in net asset value per share was also noted, along with a current investment portfolio valued at $876 million across 94 companies. These are recent developments that highlight the company's financial health.
The company has further plans to expand its portfolio to over $925 million by the end of the next quarter while maintaining its monthly dividend of approximately $0.13 per share. Stellus Capital also discussed refinancing SBA loans and applying for a third SBIC license. However, it was also noted that there might be an increase in funding costs next year.
According to analysts, the asset quality is slightly above expectations, with a positive outlook for portfolio growth. These findings come with a reminder that the cost of funding may rise next year but remains favorable compared to other options. The company's strategic financial management approach was highlighted with the mention of an incentive fee waiver due to a 12-quarter test.
InvestingPro Insights
Stellus Capital Investment Corporation's (NYSE:SCM) recent shareholder meeting outcomes have set the company on a clear path forward, with key decisions that could influence its financial flexibility and strategic opportunities. In light of this, current and prospective investors might find the following metrics and tips from InvestingPro particularly insightful:
The company's market capitalization stands at a robust $332.69 million, with a price-to-earnings ratio of 12.32, which may indicate a reasonable valuation in its sector. Stellus has also demonstrated a strong revenue growth of 28.77% over the last twelve months as of Q1 2024, underlining its ability to expand its financial base in a challenging economic environment.
InvestingPro Tips highlight that Stellus Capital pays a significant dividend to shareholders, boasting an attractive dividend yield of 11.63%, which is particularly notable for income-focused investors. Moreover, the company has maintained dividend payments for 13 consecutive years, underscoring a commitment to returning value to shareholders. Additionally, with liquid assets surpassing short-term obligations, Stellus appears well-positioned to meet its immediate financial liabilities.
For those looking to delve deeper into Stellus Capital's financial health and strategic positioning, there are 7 additional InvestingPro Tips available at https://www.investing.com/pro/SCM. Investors can also benefit from an exclusive offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to a wealth of investment insights and tips.
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